Prompt payment law urged to boost UK Economic rivival
Delegates at the National Enterprise Network Annual Conference have called on the government to introduce stricter laws around prompt payment for businesses to encourage greater economic growth.
The conference, held at Barclays Canary Wharf HQ, saw more than 200 businesses and leading industry experts, including Enterprise Agencies, Chambers of Commerce, LEPs, Growth Hubs and specialist training providers, come together to discuss how the power of enterprise could be best harnessed to boost the UK economy.
At a panel debate on putting enterprise at the heart of government agreed on the importance of prompt payment legislation, all participants agreeing late payment was one of the most significant barriers to business growth.
Alex Till, chair of NEN, said: “As the economy chills, the first thing big companies do is extend payment terms and this impacts small businesses who are already squeezed and find themselves needing to lay off. This is real and it is happening now.”
Martin McTague, National Chair of the Federation of Small Businesses, told the panel that business people were having to borrow and dip into their savings just to meet payroll because the big companies were not paying on time.
“Our big ask is that someone in these organisations needs to be made accountable. It should be a director.”
Small Business Commissioner Liz Barclay said: “We need a cultural and behavioural change in this country to encourage faster payments. The government needs to think ‘would you rather have £10bn sitting in the hand of people who come up with financial sticking plasters to cover the last payment gap, or would you prefer to sit in small and micro business coffers where they can use it to invest in innovation, skills and growth which solve our challenges.”
As the economy chills, the first thing big companies do is extend payment terms and this impacts small businesses who are already squeezed and find themselves needing to lay off.